Site Mobile Navigation

Argentina Export Tax Sets Off Political Furor

RIO DE JANEIRO — Argentina’s lower house of Congress was preparing to vote late Friday night on whether to approve a government tax program for agricultural exports in the latest chapter of a bitter battle between farmers and the government of President Cristina Fernández de Kirchner.

Farm leaders said they were prepared to renew blockades of major highways and cut off exports of grains if the measure was approved. Hugo Biolcatti, the vice president of the Rural Society, said in a radio interview early in the day that if the tax passed, “there’s a high possibility that the strikes will return.”

The vote was unusual because the government of Mrs. Kirchner, as well as the government of her predecessor and husband, Néstor Kirchner, have not asked Congress to approve any major government action since Mr. Kirchner was elected in 2003.

Mrs. Kirchner, who was elected last October, has said that higher taxes on the agricultural sector are necessary to finance social programs and redistribute wealth. But farmers have accused the government of trying to squeeze their profits as the farmers’ costs have been rising.

Demonstrators on each side of the debate, some beating drums, held vigils on Friday outside Congress in Buenos Aires. For the past two weeks a festive mood has overtaken Plaza de Congreso, which was covered with tents representing farmers, supporters of Mrs. Kirchner and others.

With tensions rising and her approval ratings plummeting, Mrs. Kirchner decided two weeks ago to allow Congress to debate the tax program she imposed in March without its approval.

The measure ties taxes on crops like soybeans to global commodity prices. Because those prices have been soaring, farmers have been paying higher export taxes and the government’s tax revenues have boomed. The program caused a rebellion in Argentina’s countryside.

The tax on soybeans, Argentina’s most important farm export, had been 35 percent and it has floated to more than 44 percent, depending on global prices for the commodity.

An error has occurred. Please try again later.

You are already subscribed to this email.

While the farmers clamored for Congress to debate the merits of the new tax system, Mrs. Kirchner’s government sent increasingly mixed messages about the vote. Agustin Rossi, the congressional leader of Front for Victory, a wing of the Peronist movement that supported Mrs. Kirchner, said legislators would be able to modify the bill. But then Mrs. Kirchner and her husband said no modifications would be allowed. Mr. Kirchner is the current leader of a Peronist party.

Mr. Rossi late Friday proposed modifying the law so that smaller producers would pay fixed taxes of 30 percent or 35 percent depending on their production. But he called Mrs. Kirchner’s tax program “a good idea.”

The Argentine news media and local analysts described Mr. Kirchner as having a heavy hand in influencing legislators to support the measure. “Néstor is playing a big role,” said Artemio López, a sociologist and a political consultant. “This will not change.” Still, Mr. Lopez said, “party discipline is essential.”

The Kirchners have called the farmers unpatriotic. Mr. Kirchner said their profits, which he described as extraordinary, should “belong to all Argentines.”

They have also underestimated the farmers’ resolve. Mr. Lopez said that Mr. Kirchner, with whom he talks regularly, told him the day after the conflict began in March that “it would not last more than three days.”

The continuing conflict has damaged Mrs. Kirchner’s government, with her approval rating falling to nearly 20 percent in some polls. It has also hurt Argentina’s agricultural exports, slowed the economy and led to scattered food shortages and rationing.

Vinod Sreeharsha contributed reporting from Buenos Aires.

A version of this article appears in print on , on Page A9 of the New York edition with the headline: Argentina Export Tax Sets Off Political Furor. Order Reprints|Today's Paper|Subscribe